Mortgage advice for 2013

A workshop attendee looks over a guide on preventing foreclosure during a 2008 workshop titled "The Housing Crisis: How it Affects You, How it Affects our Neighborhood" in a church gymnasium in the Queens borough of New York. Photo Credit: AP (2008)

Here are 10 mortgage tips to help you with your mortgage decisions in 2013.

1. Stop procrastinating and refinance. If you haven't refinanced recently, you're probably paying a higher interest rate on your mortgage than you should. Take advantage of today's record-low mortgage rates while they last.

2. Buyers, get moving. With rates near the bottom and home prices on the rise, it's still a perfect time to buy a house. Get a mortgage preapproval before you start shopping.

3. Compare FHA vs. conventional loans. Many homebuyers opt for a Federal Housing Administration mortgage because it allows them to buy a home with as little as 3.5 percent down. But the already costly FHA fees that are added to your loan will increase again in 2013. Consider saving a little extra for a down payment on a conventional loan.

4. Ensure that your credit is golden. Credit standards remain tight. As new mortgage rules are unveiled in 2013, the standards are not expected to loosen. If you plan to get a mortgage anytime soon, you must treat your credit as one of your most valuable assets. You'll need a credit score of at least 720 to get the best rate. Borrowers with a credit score of 680 or more can still get a good deal.

5. Want to pay off your mortgage earlier? If you are one of those homeowners who dream about being mortgage-free, the low-rate environment may be a good opportunity to refinance your 30-year mortgage into a 15- or 20-year loan. Make sure you can afford the higher payments on the shorter loan and that you have money saved for emergencies.

6. Underwater refinancers: Don't take "no" for an answer. If you owe more than your home is worth and have tried and failed to refinance, give it another shot in 2013. The Home Affordable Refinance Program, or HARP 2.0, was revamped to allow homeowners to refinance regardless of how deeply underwater they are.

Lenders are much more open to HARP 2.0 refinances these days than they were a few months ago. If one lender says you don't qualify for a HARP refi, don't take "no" for an answer. Try to find a lender willing to do it.

7. Give your lender a chance. If you have trouble paying your mortgage, don't ignore your mortgage servicer. There are new programs available for borrowers who struggle to keep up with mortgage payments, including forbearance for those with FHA mortgages. Lenders have been more willing to work out delinquent loans through loan modifications and even short sales for homeowners who can't afford to stay in their homes.

8. Shop for a low rate and good service. Even with rates hovering near record lows, you should still shop for the best mortgage deal. Get quotes from at least three lenders and compare not just the interest rate but also closing costs and the quality of their service. Favor lenders that have a reputation of closing on time.

9. Approved for a mortgage? Leave your credit alone. Most lenders order a second credit report for the borrower a few days before closing. Don't open new accounts or charge up your credit cards at the furniture store while you wait for closing day.

10. It's not over until the loan closes. You've submitted your mortgage application and locked a rate. The race has just begun. Submit any documents requested by your loan officer or mortgage broker within 24 hours, if possible. Lenders will remain overwhelmed with the large volume of refinance applications at least through the first few months of 2013. Follow up with your lender or mortgage broker at least once a week to ensure the process goes smoothly.

The 30-year fixed-rate mortgage fell 1 basis point to 3.58 percent. A basis point is one-hundredth of 1 percentage point.

The 15-year fixed-rate mortgage rose 1 basis point to 2.88 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, rose 1 basis point to 4.08 percent.

The 5/1 adjustable-rate mortgage fell 1 basis point to 2.76 percent. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.

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